IGL.NS WACC - Weighted Average Cost of Capital

The WACC of Indraprastha Gas Ltd (IGL.NS) is 13.6%.

The Cost of Equity of Indraprastha Gas Ltd (IGL.NS) is 13.65%.

The Cost of Debt of Indraprastha Gas Ltd (IGL.NS) is 6.85%.

	Range	Selected
Cost of equity	11.50% - 15.80%	13.65%
Tax rate	22.10% - 22.40%	22.25%
Cost of debt	6.20% - 7.50%	6.85%
WACC	11.5% - 15.8%	13.6%

WACC

IGL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.56	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	15.80%

Tax rate	22.10%	22.40%
Debt/Equity ratio	0	0
Cost of debt	6.20%	7.50%

After-tax WACC	11.5%	15.8%


Selected WACC	13.6%

IGL.NS's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for IGL.NS:

cost_of_equity (13.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.56) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.